Looming Budget Cuts Could Impact Federal Acquisition Workforce

The federal government could lose approximately 270,000 employees, or about 13 percent of the federal workforce, if automatic budget cuts—called sequestration—occur, according to a recent industry group report.  Because federal contract officers’ positions are not protected from those cuts, the possibility of agency hiring freezes and layoffs of such essential staff is a distinct possibility. If this happens, agencies could see increased litigation and cost overruns and contractors could see more bundled federal contracts. To avoid defaulting on the nation’s debt obligations and raise the debt ceiling, Congress enacted the Budget Control Act of 2011 (BCA). That law provides for a sequestration process spending cuts of $1.2 trillion—half from defense and half non-defense spending—beginning in 2013. These across-the-board cuts could have been averted under the law, had the bipartisan Joint Select Committee on Deficit Reduction—the “super committee” consisting of 12 members of Congress—agreed on more calculated cuts. However, the super committee failed in its efforts and Congress has yet to present a legislative solution. According to Office of Management and Budget, spending on all federal contracts more than doubled between 2000 and 2008 – reaching over $500 billion in 2008. However, in that same time period, the number of contracting officers increased only about 10 percent to nearly 30,000, the Office of Personnel Management reports. Moreover, increased federal oversight and new contracting regulation each year lead to further strain on the existing contract officer workforce. An inadequate contracting officer workforce could lead to more litigation and insufficient contract planning and oversight, likely amounting to cost overruns on projects.  Furthermore, as the most knowledgeable federal employees retire, a smaller, less experienced workforce may also face problems defining requirements clearly and overseeing contract administration.  Some agencies already cite inadequate staffing as a reason for bundling contracts. Further personnel cuts could lead to agencies bundling even more contracts, thereby inhibiting full and open competition, for which AGC consistently advocates. For more information, please contact Jimmy Christianson at 703-837-5325 or christiansonj@agc.org.